DirecTV’s Access to Cable Shows to Stay

Broadcast satellite operator DirecTV and other rivals of the nation’s big cable TV operators won a victory Thursday when federal regulators extended a government law granting cable competitors equal access to cable TV programming.

The 3-1 vote by the Federal Communications Commission was an acknowledgment by the agency that a decade of government effort to stimulate greater competition in the cable-TV market had fallen short. Cable giants such as AT&T; Corp., Comcast Corp. and AOL Time Warner Inc. still control more than 70% of the subscription video market, the FCC said.

Congress did not have that outcome in mind when it approved the 1992 Cable Act establishing the prohibition on exclusive programming contracts. Lawmakers had hoped to stimulate more video competition by preventing cable operators such as AOL Time Warner, which own affiliated video production units, from entering into exclusive programming with other large cable operators.

But the majority of FCC commissioners--resisting intense lobbying by large cable operators--extended the ban for another five years, saying a continuation of the exclusive contract ban was necessary. They want to ensure that regions of the country that lack cable service and only have access to satellite video from companies such as Hughes Electronics’ DirecTV and EchoStar would be able to receive the Home Shopping Network, QVC and the estimated 40% of other cable television shows now controlled by major cable operators.

“The record supports the order’s conclusion that the prohibition against exclusive contracts continues to be necessary to preserve and protect competition and diversity,” said FCC Commissioner Kevin J. Martin, a Republican.

The industry was divided over the FCC vote. One leading cable TV trade blasted the FCC decision. But representatives of smaller cable TV operators and satellite TV executives voiced support of the FCC’s action.

“The program access rules were instrumental in helping DirecTV obtain programming to compete with entrenched cable operators, and today’s decision by the FCC preserves competition and diversity in the multichannel TV marketplace,” said Roxanne Austin, DirecTV’s president.

Dan Brenner, a senior vice president at the National Cable & Telecommunications Assn., said his group was “disappointed that the FCC chose not to eliminate this regulatory relic.... Today, nearly every customer has several video distributors to choose from, and nearly one-quarter of subscription television customers choose [direct broadcast satellite] over cable.”

Pay TV competition has grown over the last decade. Satellite operators such as EchoStar and DirecTV now control about 20% of the market with 18 million subscribers.